Corporations
A business corporation is an institution established for the purpose of making profit. It is operated by individuals. Their shares of ownership are represented by stock certificates. A person who owns a stock certificate is called a stockholder.
There are several advantages of the corporate form of ownership. The first is the ability to attract financial resources. The next advantage is that the corporation attracts a large amount of capital, which it can invest in plants, equipment and research. The third advantage is that a corporation can offer higher salaries and thus attract talented managers and specialists.
The privately owned business corporation is one type of corporation. There are some other types too. Educational, religious, charitable institutions can also incorporate. Usually such a corporation does not issue stock and is nonprofit. If there is a profit it is reinvested in the institution rather than distributed to stockholders.
In some western countries, cities, states, federal government and special agencies can establish governmental corporations. A few examples of these governmental corporations are state universities, state hospitals and city owned utilities. Governmental corporations are non-profit as a rule and usually they do not issue stock certificates.
Active Vocabulary
corporation |
корпорация |
to establish |
учреждать |
stock certificate |
сертификат акций |
stockholder (shareholder) |
акционер, держатель акций |
to attract financial resources |
привлекать финансовые ресурсы |
to offer high salaries |
предлагать высокие зарплаты |
to attract a large amount of capital |
привлекать большой капитал |
educational, religious, charitable institutions |
образовательные, религиозные, благотворительные, учреждения |
to issue stock |
выпускать акции |
nonprofit |
неприбыльный |
to reinvest |
вкладывать ещё раз |
Comprehension Questions
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Who can own a corporation?
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Is a corporation necessarily larger than a sole proprietorship?
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What are the advantages of the corporate form of ownership?
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What can you about the disadvantages of the corporate form of ownership?
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Do the corporations issue stock to stockholder?
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What kind of corporations do not usually issue the stock?
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What world known corporations do you know?
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What types of business usually take the corporate form of ownership?
Vocabulary Practice
Choose the necessary word and put it in the sentence.
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